Year-on-year GDP growth in China in the second quarter this year was 6.7%, same as that for the first quarter, according to the half-yearly economic report released by the National Bureau of Statistics. The Nielsen Consumer Confidence Index (CCI) exemplifies the steady growth of China’s economy, as the CCI increased one point to 106 in the second quarter. It shows that Chinese consumers are adjusting to the new normal and their confidence level remains stable.

“Economic growth will slow down in the new normal and this trend may continue for a relatively long time. Nielsen’s research shows that not only the economy adjusted to this new trend, but that consumers have also adjusted their consumption habits to adapt to this new normal,” says Yan Xuan, president of Nielsen Greater China. “As a result, the CCI remains stable in the first half of this year, and we are witnessing the Chinese consumers consumption behavior has also entered a ‘new normal’.”

The global Consumer Confidence Index (CCI) in the second quarter was 98, remaining relatively flat. China’s CCI ranked eighth in the second quarter and has consistently maintained its position within the top ten CCI’s globally.

According to Nielsen’s report, consumers were more optimistic about job prospects and personal finance during the first half of 2016 than they were in the second half last year. Fifty-nine percent of the respondents believed their job prospects are excellent or good, an increase of 3 percentage points. What’s more, 54% respondents think their personal finances are excellent or good, while only 50% believed so in the previous quarter.

“Nielsen figures show that consumers are confident about their future job prospects, personal finances and willingness to spend in the first half of the year,” says Yan Xuan, president of Nielsen Greater China. “This trend is likely to continue, as China’s economic development is stable, people’s income have been improved, and consumers’ willingness to spend in small and medium-sized cities are steadily growing.”

Consumers become more conservative on daily household spending, and 49% households want to hold consumptions rather than increasing

According to Nielsen’s survey, 49% of families intend to maintain the current family spending level rather than increase it in the second quarter, dropped by 4 percentage points. The proportion of families that are willing to increase family spending dropped 1 point to 47% in Q2.

The survey also found that consumers are spending more on personal care, physical and mental health to improve life quality, which exemplifies the consumption upgrade trend. In 2016, consumers are willing to spend more on improving their appearances, as clothing and beauty care are the top two categories that they want to spend more on. Apart from that, consumers would also like to spend more on travelling and vacations, followed by food and beverages, entertainment and sports.

Fast-moving consumer goods consumption is also driven by quality of life needs. According to the survey, facial masks (16%), lipsticks (9.3%) and bottled water (8.7%) are the fastest growing categories, in terms of sales volume.

It was also found that Chinese consumers are becoming more practical and give more attention to product quality. Security (63%), health (58%) and convenience (58%) are the most important purchase decision factors. However, only 38% respondents consider being high-end an important characteristic when making their purchase decision.

“A new quality consumption revolution will take place in the future five to ten years. Spending on quality of life will become the new normal and lend impetus to the market. Consumption upgrade will definitely continue,” says Yan Xuan, president of Nielsen Greater China.

Eastern/Southern consumers are open to trading up and try new. Western/Northern consumers tend to buy products they are familiar with

Statistics show that consumers’ willingness to spend soared in Southern China but declined in Western and Northern China in the second quarter.

Consumers in eastern and southern China are more open to new products and quality goods, as 25% of eastern Chinese consumers and 24% of southern Chinese respondents said that they were willing to buy new products; 34% of eastern Chinese consumers and 30% of Southern Chinese consumers prefer quality goods. However, consumers in western and northern China tend to be more conservative, as only 18% of eastern Chinese respondents and 13% of northern Chinese respondents were willing to try new products. Nearly 60% of them (insert actual %) prefer products they have bought before.

Sales of big pack economy-sized products grew rapidly in western and northern China. For example, sales of 700ml bottles of shampoo increased 8.4% and 3.8% in western and northern China respectively, while sales increased in east and South China by only 0.9% and 1.8%.

Consumers in eastern and southern China take entertainment seriously. About 39% of Eastern Chinese respondents and 35% of southern Chinese respondents plan to buy entertainment products in a year, while only 21% of western Chinese respondents and 26% of northern Chinese respondents plan to do so. In terms of travel, 62% and 45% of consumers in East and South China will buy travel products in the following year, while only 30% and 32% of Western and Northern Chinese consumers planned to do so.

Consumers in Eastern and Southern China have more access to new channels and new products, and embrace new technologies. According to the survey, residents in Easetrn and Southern China have more electronic device. For example, 13% of Eastern Chinese consumers and 14% Southern Chinese consumers use eReaders, while only 6% and 9% residents in western China and northern China use that. The same penetration gap exists in smart watch, smart wrist band, game console categories.

Post-1990s’ consumer confidence increased in Q2, surpassed all age groups

The Consumer Confidence Index of post-1990s consumers in Q2 measured at 110, higher than that of any other age groups, followed by post-1960s (108), post-1980s (105), post-1970s (104) and post-1950s (104). According to Nielsen statistics, post-1990s’ strong confidence comes from their optimistic prospects of jobs, personal finances and willingness to spend.

Post-1990s have their own distinctive characteristics: they are more open to new things and have strong willingness to spend. According to the survey, 25% of the people born in the 1990s are willing to buy new products, higher than that of people born in the 1980s (19%) and 1970s (21%). In addition, they are also willing to buy better products (31%), while 29% post-1980s and post-1970s are willing to pay more for better products. What’s more, online shopping is extremely popular among post-90’s segment. The survey shows that 93% of them have shopped online in the past three months, and 71% of them will go online shopping in the next six months.